Matthew Ellul Sullivan assesses how Middle East war could impact Malta

Matthew Ellul Sullivan, co-CEO of Sullivan Shipping Agencies Ltd, said that while Malta should not be directly impacted by the ongoing war in the Middle East, there could be some indirect impact.   

“Malta doesn’t have much work in the Middle East; oil companies are the most impacted and Malta doesn’t receive huge consignments of oil,” Mr Ellul Sullivan told MaltaCEOs.mt.

“Enemed [a Government-owned company which supplies most fuel] purchases oil, but not in large consignments and demand has decreased since the power station started running on gas. Oil is also stored at Evos’s [a bunkering company with facilities in Birżebbuġa] facilities but this is mostly for trans-shipment purposes; that oil hardly ends up in Malta.”

Like other countries, Malta could be negatively impacted by surges in the market price of oil, with Brent crude climbing to nearly $80 a barrel in the wake of the conflict. However, he argued that since this would be a global issue, it shouldn’t harm Malta’s competitiveness. 

Mr Ellul Sullivan said Malta could be negatively impacted if the closure of the Strait of Hormuz results in fewer vessels passing through the Mediterranean.

“Fewer vessels operating means we will have less work, such as in bunkering and services. It is hard to tell how much is due to what, but it won’t help,” he pointed out. 

On another note, he said that if the conflict drags out, one must observe whether cruise liners that operate in the region decide to move their business elsewhere, in which case Malta could indirectly benefit. 

In terms of containers arriving to Malta from Asia, an estimated 25 per cent of all consignments to the island, the Middle East war is unlikely to have much of an impact. 

Particularly since the Red Sea crisis, which saw Iran-backed Houthi rebels attack and seize commercial vessels in the Red Sea, Malta has been forced to rely on the longer and costlier route around the Cape of Good Hope. 

As for US President Donald Trump’s pledge to ensure the free flow of energy through the Persian Gulf with insurance guarantees and naval escorts “if necessary”, Mr Ellul Sullivan said the current situation is too fluid to assess what impact such a move could have. 

However, he remarked that, even if ship owners are fully covered by insurance, they will still be concerned if they fear their crew will come under attack in the region.

Photo: Matthew Ellul Sullivan/ LinkedIn